Payday Loan Battle Moves to Public Comment
The battle for payday loans, and how strict the U.S. federal regulations will be in governing it, intensifies as a deadline draws near. According to some reports, the payday loan industry has received many letters of support before the May 15 deadline for public comment.
The issue is the US Consumer Financial Protection Bureau (CFPB’s payday loan rules). They were written under Richard Cordray’s authority, who was previously the director of this agency. The Obama-era appointment sought to implement new underwriting requirements to lenders (such as checking borrowers ability to repay payday loan loans). Another element of the rule concerned how often a bank can debit payments from a customer’s account. Find out more at https://www.paydaychampion.com/.
Kathleen Kraninger was appointed principal.
Comments from the public
According to The Wall Street Journal, “Payday loan lenders have mobilized client to push for the federal government’s ease Obama-era regulations in the industry,” according to the newspaper. The period is just 90 days away and the newspaper claimed that “Lenders are organizing thousands of clients, who have sent duplicate support comments.” Allied Progress said the “consumer-group” that this is a sign of progress.
According to the report this group “found that nearly one quarter of the 16,761 publicly submitted comments as of May 11. contained duplicate language supportive of the latest regulatory assessment.” It is not uncommon for parties affected by regulatory changes make it available to consumers and citizens prewritten letters and comments to submit to regulators.
There have been approximately 26,000 comments about the payday loan proposal.
This latest dispute over letters of comment is part of the ongoing battle to regulate America’s payday lending market. A federal judge ordered a suspension on August 19, 2019 of compliance dates for the “payday loan rules” that were established around two years ago by CFPB.
The debate around payday loan rules is part a bigger struggle over the direction and purpose of the CFPB. It was created after the 2008 financial crash.
Before Kraninger took control at the federal government agency, there had been Acting Director Mick Mulvaney. He was a dissatisfaction about the regulations as they were (now canceled). When Kraninger became the permanent chief for the CFPB, it was widely expected that they would soon announce a modification to the proposed rules. They might also revise some more controversial points.
In a public announcement, the CFPB pointed out that the drafts could “reduce the access to credit and lower competition in those states that have determined it to be in the best interests their residents to use such products.” Therefore, further revisions and review are required. Kraninger added that she looks forward the collaborative approach to the process.
Kraninger described the Bureau’s efforts to revise rules by saying, “The Bureau is going to evaluate all the comments, weigh the evidence and make a determination.” “In the meantime, we look forward to working together with other state or federal regulators to enforce law against bad actors. We also encourage strong competition within the market to improve access to credit, quality, and price. for consumers. “
Opponents to the rule-change have raised their alarms.
“The Kraninger CFPB offers a Valentine’s Day surprise to payday lenders, helping Americans continue to be trapped in crippling and expensive debt cycles,” Rebecca Borne of the Center for Responsible Lending announced when the news announcements were made.
The payday loan controversy will not end once public comment is closed.
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